M&G’s Rhodes picks up Aberdeen after EM underperformance

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M&G’s Stuart Rhodes has started a position in Aberdeen Asset Management on the belief that the market overreacted to the impact of the emerging market sell-off on its business.

Rhodes initiated a position in the asset management house, along with semiconductor firm Xilinx and casino operator Sands China, in his £7.5bn M&G Global Dividend fund during July.

Aberdeen has a strong strong franchise in emerging markets and Asia Pacific equities. Both of these regions have underperformed developed markets in recent months and were hit especially hard during the sell-off sparked by

The fund’s latest factsheet says: “The recent underperformance of those regions has impacted the share price, which Stuart took advantage of to establish the position at an attractive price.”

Aberdeen’s share price has declined by 19.5 per cent over the past six months as investors became concerned about the group’s exposure to emerging markets. More than 40 per cent of the company’s assets under management are in emerging market or Asian equities and debt.

However, commentators have joined Rhodes in suggesting that the market’s reaction to emerging market underperformance and Aberdeen may been excessive.

Brewin Dolphin equity analyst Ruairidh Finlayson said last month: “Having considered Aberdeen’s enduring long-term fund track records, industry fund flow breakdown and fund investor characteristics, we believe the market reaction towards the shares is overdone.”

M&G Global Dividend’s calendar year performance to 19 July 2013

  YTD 2012 2011 2010 2009
M&G Global Dividend 18.26% 11.07% -2.36% 19.85% 28.02%
16.33% 9.43% -9.27% 15.78% 22.95%
1.66% 1.50% 7.62% 3.51% 4.12%
  90 / 247 109 / 235 17 / 218 49 / 201 47 / 191
2 2 1 1 1

Source: FE Analytics